Author Topic: WeWork Valued at 35 Billion  (Read 8809 times)

DTEJD1997

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Re: WeWork Valued at 35 Billion
« Reply #20 on: June 18, 2018, 07:16:39 AM »
14M sqft as of April '18, giving us a very clean $2,500/sqft valuation, before community adjustments of course.

Well that certainly is interesting!

I bought my 2 office buildings for about $11/sq. ft.  Obviously, my buildings are not as nice, and in an inferior location...but they are NOT in the vast wastelands...and they are operating buildings (electric, air condition, plumbing, and so on).  Hard to believe that there are differences that great in valuation in the same country.

I look to buy other commercial real estate....nicer buildings in good shape WITH rent paying tenants can be had for $60 sq. ft.  Once again, these are NOT buildings in the wastelands, tenants are professionals...

I suspect that one group is "under priced" and another set is "overpriced"...time will tell...


gokou3

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Re: WeWork Valued at 35 Billion
« Reply #21 on: June 18, 2018, 07:28:34 AM »
14M sqft as of April '18, giving us a very clean $2,500/sqft valuation, before community adjustments of course.

This is insane.  WW is basically in a spread business - pay long-term rent to a landlord, do something to the premise, and then sub-lease it short(er)-term at a hopefully higher price while taking all the hassles and risks of vacanies, dealing with small tenants, etc.  If they are successful at it, then 1) the landlord would rise its rent at renewal, and/or 2) the landlord will copy the not-so-secret sauce.  In fact, large landlords like Brookfield must be already thinking about it, per below (i think the deal has been called off since though):

https://www.ft.com/content/2e670bea-e82a-11e7-bd17-521324c81e23


Does anyone know how much spread WW earns, i.e. what's the rent difference between their premises and a comparable space?

johnny

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Re: WeWork Valued at 35 Billion
« Reply #22 on: June 19, 2018, 02:26:06 AM »
I'd say the locations I've seen seem to be something like maybe 65% "rented" space v. 35% community space. But the rates on the 1 person offices are pretty silly high on a per square foot basis. I'd say you're paying something like $800 for 60 square feet in DTLA. So add 40sqft of shuffleboard or couches to that and you're paying $8/sqft in a market where comparable office rents are probably like $2-3.

Their pricing on substantially higher occupancy arrangements don't seem to decay very much on a $/sqft basis either, so going off of the 1-person office is not as distortive as it may intuitively seem.

I bought my 2 office buildings for about $11/sq. ft.  Obviously, my buildings are not as nice, and in an inferior location...but they are NOT in the vast wastelands...and they are operating buildings (electric, air condition, plumbing, and so on).

You're never going to be able to drop bonds in half-billion dollar increments being that boring bro

johnny

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Re: WeWork Valued at 35 Billion
« Reply #23 on: June 19, 2018, 07:40:17 PM »
Since everybody here is so skeptical, thought I'd drop this take on the company--not exactly a screaming bull case, but it presents the important components of the bull case in a reasonable way: https://www.cbinsights.com/research/report/wework-strategy-teardown/


Some things I thought were interesting:

1) There is an implication 4 years ago that they're basically turning around and leasing, all-in, at about 2x what they pay.

2) Related to 1, this article mentions a 30-40% operating margin

3) They're really leaning hard on software to try and extract as many "desks" from a space as possible--this is probably a meaningful advantage they have over the competition, it's palpable if you just tour a few different coworking spaces.

4) This claim, for which no elaboration is offered:

"This technology, combined with increasing buying power from constructing at scale, has lowered the cost of adding a new desk to $9,504 in September of 2017, from $14,144 a year prior, representing 33% savings."

Though hunting those numbers down they seem to be a "gross capital expenditures / desk" calculation.

moneyball

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Re: WeWork Valued at 35 Billion
« Reply #24 on: August 27, 2018, 08:43:04 AM »
Could someone post or dm the bond prospectus, I know itís out there but had it saved in a place I no longer have access to. Thanks if you have it!


Ahab

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Re: WeWork Valued at 35 Billion
« Reply #26 on: August 20, 2019, 09:34:23 PM »
Please God, let the IPO succeed so I may short it.
Long: FNMAT, FNMAN, FMCCL, FMCKO, BAC, JPM, GOOG, JD, MO/PM
Short: PCG, TSLA
Twitter: AhabValue

DTEJD1997

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Re: WeWork Valued at 35 Billion
« Reply #27 on: September 09, 2019, 07:36:00 PM »
hey all:

Looks like the IPO of WeWork is now in jeopardy.

Please see:

https://www.zerohedge.com/health/softbank-urges-wework-shelve-its-ipo-its-time-think-unthinkable

Could this mark the height of the market?  Especially that of the "Unicorn IPO's"?

Gamecock-YT

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Re: WeWork Valued at 35 Billion
« Reply #28 on: September 09, 2019, 08:08:55 PM »
hey all:

Looks like the IPO of WeWork is now in jeopardy.

Please see:

https://www.zerohedge.com/health/softbank-urges-wework-shelve-its-ipo-its-time-think-unthinkable

Could this mark the height of the market?  Especially that of the "Unicorn IPO's"?

Vision Fund II to save the day.

Gregmal

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Re: WeWork Valued at 35 Billion
« Reply #29 on: September 13, 2019, 08:56:47 AM »
IPO price keeps sliding.

One thing I've wondered, and more so lately, is this.

Has anyone here been involved in a funding round or gotten the up close pitch on this?

I am super curious because I just have a tremendously hard time reconciling how enormous the valuation gap seems to be between what supposedly sophisticated institutional investors are paying for this, and what common sense and conventional wisdom seem to state based on whats readily out there. Its abnormally perplexing actually.